Jairam Ramesh asks RBI, Sebi to probe allegations against Adani Group | Latest News India - Hindustan Times
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Jairam Ramesh asks RBI, Sebi to probe allegations against Adani Group

ByShweta Kumar
Feb 15, 2023 03:41 PM IST

The Securities and Exchange Board of India told the Supreme Court that an enquiry into a report of US firm Hindenburg Research against the Adani Group as well as related market activities was underway

NEW DELHI: Senior Congress leader Jairam Ramesh has asked Reserve Bank of India (RBI) governor Shaktikanta Das and Securities and Exchange Board of India (Sebi ) chairperson Madhabi Puri Buch to probe allegations of stock manipulation against the Adani Group and ensure that “excessive debt exposure” by the group does not destabilise India’s banking system.

Senior Congress leader Jairam Ramesh during a press conference, at AICC Headquarters in New Delhi on Tuesday. (PTI File)
Senior Congress leader Jairam Ramesh during a press conference, at AICC Headquarters in New Delhi on Tuesday. (PTI File)

The Congress general secretary, who put out his letters to RBI and SEBI on Twitter on Wednesday, said he expressed the hope that a full-fledged independent investigation will be carried out to look into the many allegations raised against the Adani Group.

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Hindenburg’s report, released on January 24, claimed “brazen accounting fraud” and “stock manipulation” by the Gautam Adani-led group. Though the conglomerate rejected the report as “unresearched” and “maliciously mischievous”, it triggered a massive rout of Adani Group stocks, with the flagship firm losing over $120 billion in days, and forcing the cancellation of a 20,000 crore secondary share sale after it had scraped through.

On Monday, Sebi told the Supreme Court that an enquiry into the Hindenburg report as well as related market activities was underway.

In his letter to RBI, the Rajya Sabha member asked the banking regulator to look into the Adani Group’s true exposure to the Indian banking system and the possible guarantees that the group companies may have been given by Indian banks if foreign funding dries up.

“Public sector financial institutions like the Life Insurance Corporation of India and the State Bank of India have been unusually generous to the Adani Group in recent years. The RBI must ensure that risks to financial stability are investigated and contained,” the MP said.

Jairam Ramesh’s letter to Sebi also underscored the need to investigate potential violations and ensure complete transparency about who is investing in Adani Group companies.

“Given the Adani Group’s size and political connections, it is incumbent that such investigations are seen as fair and complete, with no favour shown to the influential business group,” the Congress general secretary stressed.

“Any failure to do so will cast a shadow on Indian corporate governance and on India’s financial regulators, and could affect our ability to raise funds globally”, he argued.

The Congress leader also flagged the inclusion of Adani Enterprises in the widely used National Stock Exchange Nifty 50 index in September 2022 despite “the firm’s weak fundamentals, an excessive price-to-earnings ratio and a tiny free float”.

He further claimed that adding Adani Enterprises compelled supposedly conservative Nifty index funds to make significant purchases of this risky stock, including the Employees Provident Fund Organisation, India’s largest pension fund. “In recent days, global stock indices have suspended Adani Group companies while the matter is investigated, but the NSE has failed to take any similar action to protect investors,” Ramesh said.

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